A year has passed since Cate Archer foiled the plans of the terrorist organization known as H.A.R.M. The tension between USA and the Soviet Union has increased, and the two powers quarrel over a tiny, but strategically important island of Khios. Cate is once again recruited by the secret British organization UNITY, whose goal is to avert international conflicts and preserve the world peace. As Cate is sent to investigate a secret meeting, she meets new and old villains who, once again, won't stop until she is out of their way to world domination.

No One Lives Forever 2 is the sequel to The Operative: No One Lives Forever, casting the player as the super-spy Cate Archer in the 1960's. As in the first game, many different weapons and items are available to Cate, from pistols to automatic weapons, as well as her trusty lipstick bomb and other gadgets. The sequel introduces new weapons and gadgets, such as eye shadow that doubles as a tazer, a robotic bomb disguised as a kitten, and others. The game enhances the light role-playing angle from the original, as the player is now able to gather intelligence and upgrade Cate's sneaking and shooting abilities as well as equipment.

The sequel retains the humorous tone of its predecessor and takes the player to various exotic locations such as Japan, India, and a trailer park in Ohio during a tornado. Players may also go online and engage in deathmatch or cooperative mode, teaming up against the enemy.